Forecasts raised after big jumps in NODX and trade growth
Non-oil exports were up 9.4% in Q2, tipped to grow 2.5-3.5% for full year; total trade upgraded to 5-6% for 2018
Singapore
NON-oil domestic exports jumped 9.4 per cent year on year in the second quarter, up from 1.1 per cent in the first, driving government planners to raise the NODX's full-year growth forecast from 1-3 to 2.5-3.5 per cent.
Similarly, the projection for total merchandise trade growth in 2018 is upgraded from 3-5 to 5-6 per cent after a stronger showing that saw overall trade expanded 10.2 per cent in April-June - against 2.5 per cent in the first three months of the year.
"Total trade and NODX performed better-than-expected in 2Q 2018, on the back of favourable sector-specific export trends in the food & beverages, machinery and pharmaceutical clusters, while an improvement in oil prices supported our oil trade," said Enterprise Singapore, the government trade promotion agency.
But the agency, which released the latest quarterly trade figures on Monday, cautioned again that while NODX and total trade growth are likely to remain firm this year, they might moderate from 2017's pace.
It sounded the same note of caution in its last update.
The International Monetary Fund has maintained its 2018 global economic growth forecast at 3.9 per cent, though the outlook for the Euro area, Japan and the United Kingdom has worsened. Singapore's key trade partners like China, the Newly Industrialising Economies and Asean-5 are still tipped to grow a bit slower than, or the same as, 2017.
Meanwhile, downside risks such as trade tensions, rising global interest rates and tightening financial conditions might weigh on global growth and trade flows. The World Trade Organisation, the global watchdog for trade, expects world merchandise trade volume to grow 4.4 per cent this year, broadly matching the 4.7 per cent rise in 2017.
Oil prices are projected to be higher in 2018 than in 2017, which is good news for Singapore's oil trade.
Singapore's oil domestic shipments jumped 20.6 per cent in the second quarter, extending the 8.6 per cent increase in the first quarter. The shipments fell 7.4 per cent in volume terms, sharper than the 1.5 per cent drop in the previous quarter.
Thanks to higher oil prices, overall oil trade rose 23.2 per cent in terms of value in the second quarter, up from 5.1 per cent in the first. Non-oil trade grew 7.1 per cent, against 1.9 per cent growth in the previous quarter. Together, total merchandise trade swelled 10.2 per cent in the second quarter to S$261 billion, up from a 2.5 per cent hike in the first.
For the first six months of the year, total trade rose 6.4 per cent to S$502.5 billion. China was Singapore's biggest trading partner, with two-way trade amounting to S$65.9 billion during the period.
Bilateral trade with Malaysia, Singapore's second biggest trading partner, was S$56.1 billion in the first half of the year. Bilateral trade with the EU was S$53.9 billion and with the US, it was S$46.4 billion.
China was also Singapore's biggest NODX market in the first six months, with S$14.8 billion in shipments going there during the period. The next biggest market was the EU (S$11.3 billion), followed by the US (S$10.6 billion) and Malaysia (S$6.8 billion).
Total NODX exports jumped 5.3 per cent to S$91 billion in the first half of 2018.
In the second quarter alone, the NODX surged 9.4 per cent to S$47.6 billon. But domestic shipments for electronics continued to drop - down 7.6 per cent in the second quarter and down 7.9 per cent in the first. The biggest contributors to the latest decline were integrated circuits (minus 11.3 per cent), parts of personal computers (minus 36.3 per cent) and diodes and transistors (minus 15.2 per cent).
The NODX for non-electronic products increased 16.6 per cent, extending the 4.6 per cent rise in the first quarter. The biggest contributors to the jump were food preparations (plus 133.1 per cent), civil engineering equipment parts (plus 324.2 per cent) and pharmaceuticals (plus 31.8 per cent).
NODX shipments rose in five of the top 10 markets in the second quarter. The EU (plus 48.2 percent), the US (plus 41.1 per cent) and Indonesia (plus 14.2 per cent) were the three largest contributors to the increase.
Shipments declined in South Korea (minus 23.2 per cent), Taiwan (minus 9.7 per cent), Malaysia (minus 5.3 per cent), Thailand (minus 1.0 per cent) and China (minus 0.1 per cent).
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